Market Regime Detection

The biggest reason trading strategies fail: using a trend-following system in a ranging market. Regime detection solves this automatically.

The 4 market regimes

• Trending up — higher highs, higher lows; momentum systems outperform
• Trending down — lower highs, lower lows; short momentum systems shine
• Ranging — price oscillates between support/resistance; mean-reversion wins
• Breakout/volatile — high volatility expansion; requires tight stops and wide targets

How AI detects regime

Tidava's regime engine uses Hurst exponent analysis (>0.5 = trending, <0.5 = mean-reverting), ADX, Bollinger band width percentile, and realized vs implied volatility spread. The current regime weights every other engine's vote accordingly.

Why this matters for signals

A momentum signal in a ranging market has a negative expected value. Tidava's engine weighting shifts automatically when regime changes — momentum signals get deprioritized in ranges, and mean-reversion signals get suppressed in strong trends.